The Federal Trade Commission's interim final rule, which
clarifies that most service providers are not subject to the Red
Flags Rule, takes effect February 11, 2013.
The Federal Trade Commission (FTC) announced an interim final
Red Flags Rule to narrow the definition of "creditor"
consistent with the Red Flag Program Clarification Act of 2010
(Clarification Act). The Red Flags Rule requires
"financial institutions" and "creditors" to
develop and implement a written identity theft prevention program
premised on identifying "red flags" of identity
theft. The FTC is accepting comments until February 11, 2013,
at which time the interim rule becomes effective.
The Red Flag Program as adopted by Congress was highly
controversial because the FTC took an expansive view of who had to
comply with the Red Flags Rule, and it can be expensive and
complicated to establish an identity theft prevention
program. Prior to the Clarification Act, any creditor as
defined under the
